India is one of the leading potatoes producing country. Potatoes produced in states are suitable for value added processing like manufacturing of potato powder and flakes.
Potato powder/flakes have wide application in the processed and snack food industries, it can be used in any recipe which requires mashed potatoes. Potato flour is used in bread, pancake and waffle recipes or as a thickener for smoother sauces, gravies and soups. Also used in fabricated potato chips, extruded snacks, snack pellets, battered breaded products etc. Also used in gluten-free and allergy cooking. Potato powder is increasingly being used in a variety of food preparations like snack foods (mc Donald, Pringle, Haldiram namkeens etc.), soups, ready to eat vegetable curries and other dishes as a thickening agent and stir fries. It has strong potato flavor. It can be a binding material for preparing kheer, tikki, chops, pakoda, cutlets, stuffed paratha, kofta and other products. Its use at present is mainly in hotels, restaurants, but acceptance in household is growing due to its inclusion in items like ready to cook soups, dal, curries, etc. It gives added flavors to curries. It can be used in gulab jamun, puri and paratha.
India is one of the largest producers of potato and ranks third contributing around 7.5% to the worldâ€™s production. Potato is probably the most popular food item in the Indian diet and is a highly nutritive food. India's potato production has seen a phenomenal increase since the 1950s, mainly due to strong demand from the processing industry and remunerative returns. According to the Central Potato Research Institute (CPRI), the area under potato rose by almost 547% since the 50s, while yield rose by 267% and overall output jumped by 146%. In 2008-09, potato production (which is a winter crop) was around 28 million tonne as against 25 million tonne achieved last year. India' potato output is likely to rise by 5.1 percent to a record 32.7 million tonnes in 2009/10.
The potato powder is supplied in bulk to the manufacturers of the various snack food items and restaurants/ hotels. The major demand is in cities like Mumbai, Delhi, Chennai, Nagpur, etc. The demand is much more than the supply at present and is likely to grow with the increasing popularity of the snack foods and other items where potato powder is used as input. It has good export potential also, and European countries are largest consumer of potato flour.
Market and growth drivers
The overall size of the snack food market is estimated at Rs 45 to Rs 50 billion. The market is reported to be growing at 7 to 8 % annually. Potato chips are estimated to constitute nearly 85% of Indiaâ€™s total salty snack food market of about Rs 2,500 crore. In the Rs 19 billion branded (organized) snacks market, constituting over 40% of the market by value, Frito-Lay is estimated to command a market share of 45%, followed by Haldiram at 27% and ITC at 16%. The branded snacks market accounted for 16% by value and 12% by volume sales in 2007. According to a projection by Euromonitor International, the branded snacks market would reach a value of Rs 35 billion by 2012. The organized snacks category is sub-divided into the traditional segment (bhujia, chanachur and the like), Western segment (potato chips, cheese balls etc.) And the newly established finger snacks segment, which is an adaptation of traditional offerings in the western format.
Growth Drivers:
- Increasing consumption of ready to cook and ready to eat food products. Increasing consumption of fast food such as French fries and other potato based snacks items in all classes of people is boosting the market for potato flakes and powder.
- Changing societal trends, increasing nuclear families, aging population and people looking for more convenient snacking and pleasure food with less indulgence.
- Indian snack food industry is one of the largest snack markets in the world and is presently estimated at Rs.1530 crores and is expected to grow at 10%. Potato powder and flakes contribute around 20 to 25% of this market.
The leading brands in the market are Lays, Bennieâ€™s, Uncle Chips, Ruffles, Bingos and others. Looking to the estimated demand of nearly 50 million tonne of potato by 2020, for a nearly 1.3 million population, the production and productivity will keep rising. According to a study by McKinney & Co, the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1 per cent according to market survey. With a growing population and rising per capita income with different lifestyles consumers are willing to pay a premium for both value-added private and branded products, creating immense opportunities for manufacturers and retailers in this sector.

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